The Openpay Group Ltd (ASX: OPY) share price is on the move on Monday after the release of a business update.
At the time of writing the buy now pay later provider's shares are up 1.5% to $3.03.
Why is the Openpay share price pushing higher?
Investors have been buying the shares of the Afterpay Ltd (ASX: APT) rival after it provided an update on its performance in August.
According to the release, Openpay delivered record growth across a number of leading indicators during the month.
Openpay's active plans increased by a record 237% compared to the prior corresponding period to 986,000. This was underpinned by a 40% increase in active merchants and a record 147% increase in active customers to 359,000. Among its new merchants was sports and footwear giant JD Sports Australia.
Combined, this led to Openpay recording total transaction value (TTV) of $22.7 million in August, up 88% on the prior corresponding period. Also growing strongly was its revenue, albeit from a very small base. Openpay's monthly revenue grew 63% to $2 million.
Another positive was that the company's net bad debts as a percentage of TTV remained stable in August. They came in at 1.53% during the month.
Strong surge in demand.
Openpay's CEO, Michael Eidel, commented: "Openpay has continued its robust start to FY21 with strong growth across leading indicators again in August, despite ongoing macroeconomic uncertainty and continued stage 4 restrictions in Victoria. […] As consumers continued to seek better ways to structure purchases across their lifestyle needs, we again saw a strong surge in new customers and plans during August."
Mr Eidel also appeared to comment on the arrival of PayPal in the buy now pay later market.
He said: "We have seen strong competitive dynamics in major retail and consumer markets around the globe over the last few months. Openpay welcomes new competition as it demonstrates the global potential of BNPL as a preferred new payment option."
"Building on our strongly differentiated approach, there continues to be significant growth potential for Openpay, with our flexible payment plans, our focus on specialised verticals, and our finance savvy customer demographic. In FY20, we saw very strong usage of Active Plans by Active Customers in our 'sweet spot' of longer-term and higher-value plans: 3- to 5-month plans contributed 54% of TTV and 6+ month plans 37% of TTV. Only 9% of TTV has come from our 2-month plans in the highly competitive area of plans with up to two months duration," he added.
Woolworths deal starts.
Openpay's performance could be a given a boost this month following the commencement of its deal with Woolworths Group Ltd (ASX: WOW).
Woolworths is exclusively offering Openpay's SaaS solution across its payments and digital platform, as part of its Woolworths at Work solution.
Openpay for Business will be accessible to trade and business customers including not-for-profit organisations, charities, government agencies, schools, and businesses.
The company believes this platform will enable these organisations to gain operational efficiencies by making purchasing simpler and easier. It notes that it will allow them to focus on their core business activities, whilst allowing Woolworths at Work to deliver consumables and essential products.
